WASHINGTON — The September U.S. durables goods report was pretty much as expected, showing some core weakness that caused a little inventory building.

September durables orders were up 3.7% after a 0.2% rise in August, continuing a move higher, as expected. Orders are now up in five of the last six months, an up-trend.

However, the gains were concentrated in a few areas. Boeing Corp. reported 127 new orders, a surge from  16 in August. So it was no surprise that the month's move was led by a 57.5% surge in nondefense aircraft orders.

Orders excluding transportation were down 0.1% in a third drop, and orders ex-defense were 3.2% higher. These show core weakness centered in machinery orders, down 1.8%, and electronics, which fell 0.3% in September. Motor vehicle orders were weak as well at a 0.3% decline.

But orders for primary metals posted a 2.7% increase, their best gain since February, and computers were up 0.6%.

Shipments were up 0.2%, and inventories up 0.9%, their biggest gain since July 2011. Nondefense capital goods shipments advanced 0.4% in a second gain, but their Q3 average suggests only modest capital spending.

Overall, this report represents another modest signal for real growth, with spending and orders moderating and inventories accumulating.  

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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